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Both of the Chicago area’s major natural gas utilities spent hundreds of millions last year to replace aging gas pipes, but suburbanites got a lot more bang for their buck than Chicagoans.
Nicor Gas, which serves 2.2 million suburban customers, spent $273 million on its pipe replacement project, dubbed “Investing in Illinois,” in the 13 months ended Dec. 31. That wasn’t too far from the $232 million Chicago’s Peoples Gas spent in 2015.
But Nicor installed 164 miles of new pipes, according to an SEC filing by its parent, AGL Resources of Atlanta. Peoples last year replaced 79 miles. […]
Nicor isn’t the only utility doing this kind of work for far less money. Dominion East Ohio, which serves 1.2 million customers in northeast Ohio, including Cleveland and Akron, has managed a large-scale pipe replacement program for eight years. In that time, a spokeswoman says, Dominion has spent a little more than $1 billion and replaced 1,181 miles of pipe. Since the inception of Peoples’ program in 2011, it has spent $1.1 billion and replaced only 340 miles.
Exelon CEO Chris Crane has paid personal visits in recent weeks to House Speaker Michael Madigan and Senate President John Cullerton to warn them the power-industry giant will begin the process of shuttering its downstate Clinton nuclear plant if it doesn’t get financial help from the state this spring. Exelon also has informed Gov. Bruce Rauner, as well as Republican leaders in both chambers, according to people familiar with the discussions.
It’s far from clear, though, that Springfield will respond to the renewed threats from Illinois’ largest power generator. Exelon, owner of Commonwealth Edison, owns six nuclear stations in Illinois, generating as much as 11,841 megawatts and employing about 2,700. That’s enough juice to power well over 10 million homes.
Exelon last year warned it would have to close as many as three of its six nukes without passage of a bill that would have imposed a surcharge on electric bills statewide to provide as much as $300 million in additional revenue to the company’s fleet. The bill never saw floor action in either chamber as the budget war between GOP Gov. Rauner and Democrats who run the Legislature raged.
Exelon late last year then appeared to back off its threats and agreed to keep its plants open for the near term. Now the threats are back. The company is expected within a month to float a revised version of last year’s bill that likely won’t be quite as generous.
Still, the reception Crane got was tepid.
Cullerton told him a bill could see action if it could strike a compromise with other parties wanting comprehensive energy legislation—green groups, consumer advocates, coal interests, renewable power producers.
Exelon CEO Chris Crane looks to be a strong contender this year for highest paid utility boss in the land.
Crane last year received nearly $16 million in cash, stock and benefits, 7 percent more than the $15 million he got in 2014, according to the company proxy statement, filed today with the Securities and Exchange Commission.
Crane’s cash haul was especially robust, rising 20 percent from the year before. He cleared $3.3 million in cash—a $1.2 million salary plus $2.1 million in incentive plan payments—compared with $2.75 million in 2014, when his incentive plan payout was $1.6 million.
Crane’s pay raise came as Chicago-based Exelon boosted its earnings per share in 2015 for the first time in many years. But the company’s stock fell 27 percent in 2015 compared with the 10 percent decline in the Standard & Poor’s 500 Utility Index.
* AP…
Illinois Attorney General Lisa Madigan has demanded that a financially shaky Peabody Energy prove it has the $92 million necessary to restore Illinois mining land if it shuts down.
Madigan sent a letter Monday to the St. Louis-based coal company seeking details on the bond amount available for its southern Illinois coal mines.
Peabody told federal regulators last week its financial situation might force it to cease operations. It also delayed an interest payment.
Madigan says she fears the company’s bond funds would not be sufficient to follow state law requiring used-up mining land to be restored as timberland, wildlife habitat or rangeland.
AG Madigan’s full press release is here.
posted by Rich Miller
Wednesday, Mar 23, 16 @ 9:49 am
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Peoples’ mine replacement program has been a great failure. Its a good program that needs righting.
But comparing it to Nicor is apples and oranges. Replacing pipe under the city’s myriad of rules, regs and politics not to mention the web of infrastructure and the age of the pipe is a lot different than replacing pipe in wheaton. Some of the pipe under chicago was put into place when Lincoln was President.
Scary stuff.
Comment by Abe the Babe Wednesday, Mar 23, 16 @ 10:00 am
The current administration doesn’t want to “shake up” public utility wealth and status quo. Shaking up Springfield meant shaking off utility regulations and giving power back to the multi-millionaires guaranteed profitable returns by a compliant and willfully blinded state government.
We are entering an era in utility regulations where the status quo will be rewarded, not regulated. The ICC is a shadow of its former self and pressure is continuing to force a generation of unbiased professionals who handled energy regulations out the door, replaced by novices who want to promote Rauner’s “pro-business” malarkey.
Be prepared to get thoroughly screwed.
Comment by VanillaMan Wednesday, Mar 23, 16 @ 10:10 am
–Illinois Attorney General Lisa Madigan has demanded that a financially shaky Peabody Energy prove it has the $92 million necessary to restore Illinois mining land if it shuts down.–
Kind of late in the game to be “demanding” that, isn’t it?
News reports are Peabody is going to file for bankruptcy any day now.
After that happen, you’ll be asking a judge if the money is there.
Comment by wordslinger Wednesday, Mar 23, 16 @ 10:20 am
Lisa Madigan should be sending a letter to the EPA not Peabody,the collapse of coal fired generation and by extension coal mining is due to renewed EPA actions over the past 8 years
http://www.today.com/id/45715768/ns/today-today_news/t/new-epa-rules-threatening-aging-power-plants/#.VvKzLuIrLcs
Comment by Carbondale Chris Wednesday, Mar 23, 16 @ 10:21 am
Is miles of pipe installed the best metric to compare? Seems like people’s would have more customers to connect per mile and is likely dealing with older connections than in some of the suburbs. When I read that yesterday, I thought it was a pretty simplistic comparison that didn’t have much meaning. I still do.
Comment by 47th Ward Wednesday, Mar 23, 16 @ 10:25 am
Let the free market work.
Comment by Anonymous Wednesday, Mar 23, 16 @ 10:28 am
The collapse of coal fired generation has less to do with EPA regulations than the Free Market.
The Henry Hub spot price for natural gas on March 18 was $1.68 per million BTU.
The spot prices for coal per million BTU the same week are as follows:
Central Appalachia $1.69
Northern Appalachia $1.87
Illinois Basin $1.36
Powder River $.54
Uintah Basin $1.63
Add into that the cost of transport and only Powder River is still competitive with natural gas. Powder River has been hit less than the others, and Appalachia has been hit hardest.
It’s always amusing to listen to politicians cry about Obama not letting the free market do its thing, but then squeal like a bunch of stuck pigs when it does, and the results aren’t what they want. Remember “Drill Baby Drill” That has had more effect on the bottoming of natural gas prices and the demise of coal than the EPA has.
Comment by train111 Wednesday, Mar 23, 16 @ 10:46 am
Coal has been on the decline for decades. Natural gas is a huge reason for coal’s decline. With or without the EPA that would have happened, but even if regulations were a major factor, why would we blame the regulations and not the pollution and health risks inherent to burning coal as a reason for its decline? Do we not have the right, as free people, to demand clean air and water?
Comment by Johnny Pyle Driver Wednesday, Mar 23, 16 @ 10:56 am
Anonymous: GMAB, these are monopolies. Be prepared to be totally ripped off without checks & balances.
Comment by bwana63 Wednesday, Mar 23, 16 @ 11:41 am
I’m beginning to think PEPCO is a banned word;)
The very likelihood of the PEPCO merger for Exelon falling through today is going to keep Crane coming back for the ask. This was his big play as CEO, and it is going to cost Exelon a bundle to buy back the stock to cover the debt they went out on to try and buy PEPCO.
Don’t think for a minute that this Illinois ask isn’t another way for them to “generate revenue”.
Comment by Anon221 Wednesday, Mar 23, 16 @ 11:49 am
I believe coal will play a role in our energy future, but its share of the market will be much smaller. I think we’ll figure out how to capture carbon from coal-burning plants, utilizing a portion for manufacturing purposes and sequestering some of it underground.
In addition to lower natural gas prices, declining solar panel costs and more stringent environmental regulations, the private sector is also causing a huge ripple in the energy marketplace. Nearly half of the largest companies in the U.S., including Target, Johnson-Johnson, DuPont, GM, Unilever and Microsoft, are looking to buy or invest in increasing amounts of renewable energy to power their operations.
Comment by Going nuclear Wednesday, Mar 23, 16 @ 12:04 pm
Anonymous: Am thinking your post (which I replied to) was about the highly diminished coal prospects in the US economy. To which I say, right on.
Comment by bwana63 Wednesday, Mar 23, 16 @ 12:20 pm
=We are entering an era in utility regulations where the status quo will be rewarded, not regulated. The ICC is a shadow of its former self and pressure is continuing to force a generation of unbiased professionals who handled energy regulations out the door, replaced by novices who want to promote Rauner’s “pro-business” malarkey.
Be prepared to get thoroughly screwed.=
V-Man nails it.
Comment by Qui Tam Wednesday, Mar 23, 16 @ 12:26 pm
Sure let’s require a surcharge on customers so that this cat can keep his $16m annual package. /s
Since Excelon, and similar, is obviously a monopoly, let’s tie some strings to a surcharge. Maybe a cap, or a “fee,” on executive compensation over $2m. /s
You get in the peoples’ pocket, the people get to keep an eye on your pocket!
Comment by cdog Wednesday, Mar 23, 16 @ 1:03 pm
Looks like DC regulators just approved the Exelon-Pepco merger. That should improve the company’s finances, but don’t expect they won’t come to Springfield with their hand out. This is the same company that for a decade has opposed clean energy reforms as “too expensive.”
Comment by Senator Clay Davis Wednesday, Mar 23, 16 @ 1:26 pm
Money greases a lot of wheels…
https://www.washingtonpost.com/local/dc-politics/in-a-surprise-move-dc-regulators-give-green-light-to-pepco-exelon-merger/2016/03/23/4ace2bc0-f10e-11e5-89c3-a647fcce95e0_story.html
Comment by Anon221 Wednesday, Mar 23, 16 @ 1:38 pm
Wonder what the payout will be this year???
Daniels- “Exelon CEO Chris Crane looks to be a strong contender this year for highest paid utility boss in the land.”
Comment by Anon221 Wednesday, Mar 23, 16 @ 1:41 pm
I wonder how much the various state(IL) pension funds have invested in Exelon.
Comment by blue dog dem Wednesday, Mar 23, 16 @ 10:51 pm
blue dog dem-
Might be increasing…
From June 2015- http://www3.illinois.gov/PressReleases/ShowPressRelease.cfm?SubjectID=2&RecNum=13227
Name: Francis Idehen Jr.
Position: Board Member – State Universities Retirement Board
Governor Bruce Rauner has appointed Francis Idehen, Jr. to the State Universities Retirement Board. He brings a strong background in pension investment strategies and investment relations to the board.
Idehen is currently Vice President for Investor Relations at Exelon Corporation. At Exelon, Idehen is responsible for developing and implementing the company’s strategic investor relations program. He was previously a managing director at Exelon, where he developed and executed an investment strategy of more than $3 billion in alternative investments for the company’s pension plan and other retirement plans. Before coming to Exelon, Idehen was a Senior Portfolio Manager at Intel Corporation, and an Associate at Lehman Brothers.
Idehen holds a bachelor’s degree in economics from Yale University and a master’s degree in business administration from Harvard Business School. He lives in Chicago.
Comment by Anon221 Thursday, Mar 24, 16 @ 8:14 am